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5. Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales 20,000 Variable expenses Contribution margin Fixed expenses Net operating income 12,000 8,000 6.000 $2,000 Required: (Answer each question independently and always refer to the original data unless instructed otherwise) 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 1,001 units, what would be the increase in net operating income? 5. If sales decline to 900 units, what would be the net operating income? 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?

5. Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales 20,000 Variable expenses Contribution margin Fixed expenses Net operating income 12,000 8,000 6.000 $2,000 Required: (Answer each question independently and always refer to the original data unless instructed otherwise) 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 1,001 units, what would be the increase in net operating income? 5. If sales decline to 900 units, what would be the net operating income? 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Oslo company acc math solution

Robi 35 B/s 0 O ê ell wll 31% D 2:13 am Grameenphone Final Home As... 4. Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method of process costing. Its Work in Process T- account for the Mixing Department for June follows (all forthcoming questions pertain to June): Work in Process-Mixing Department June 1 balance 28,000 120,000 79,500 97,000 Completed and transferred to Finished Goods Materials Direct labor Overhead June 30 balance ? The June 1 work in process inventory consisted of 5,000 units with $16,000 materials cost and $12,000 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 50% complete with respect to conversion. During June, 37,500 units were started into production. The June 30 work in process inventory consisted of 8,000 units that were 100% complete with respect to materials and 40% complete with respect to conversion. Prepared by: Hasibul Islam Russell; Contact@ 01917009927 or hasibul.russell@iubat.edu Page 4 of 6 UU UBAT-INTERNATIONAL UNIVERSITY OF BUSINESS AGRICULTURE AND TECHNOLOGY Founded 1991 by Md. Alimullah Miyan Required: 1. Prepare the journal entries to record the raw materials used in production and the direct labor cost incurred. 2. Prepare the journal entry to record the overhead cost applied to production. 3. How many units were completed and transferred to finished goods during the period? 4. Compute the equivalent units of production for materials. 5. Compute the equivalent units of production for conversion. 6. What is the cost of beginning work in process inventory plus the cost added during the period for materials? 7. What is the cost of beginning work in process inventory plus the cost added dur: period for conversion? 8. What is the cost per equivalent unit for materials? 9. What is the cost per equivalent unit for conversion? 10. What is the cost of ending work in process inventory for materials? 11. What is the cost of ending work in process inventory for conversion? 12. What is the cost of materials transferred to finished goods? 13. What is the amount of conversion cost transferred to finished goods? the 14. Prepare the journal entry to record the transfer of costs from Work in Process to Finished Goods.
Transcribed Image Text:Robi 35 B/s 0 O ê ell wll 31% D 2:13 am Grameenphone Final Home As... 4. Clopack Company manufactures one product that goes through one processing department called Mixing. All raw materials are introduced at the start of work in the Mixing Department. The company uses the weighted-average method of process costing. Its Work in Process T- account for the Mixing Department for June follows (all forthcoming questions pertain to June): Work in Process-Mixing Department June 1 balance 28,000 120,000 79,500 97,000 Completed and transferred to Finished Goods Materials Direct labor Overhead June 30 balance ? The June 1 work in process inventory consisted of 5,000 units with $16,000 materials cost and $12,000 in conversion cost. The June 1 work in process inventory was 100% complete with respect to materials and 50% complete with respect to conversion. During June, 37,500 units were started into production. The June 30 work in process inventory consisted of 8,000 units that were 100% complete with respect to materials and 40% complete with respect to conversion. Prepared by: Hasibul Islam Russell; Contact@ 01917009927 or hasibul.russell@iubat.edu Page 4 of 6 UU UBAT-INTERNATIONAL UNIVERSITY OF BUSINESS AGRICULTURE AND TECHNOLOGY Founded 1991 by Md. Alimullah Miyan Required: 1. Prepare the journal entries to record the raw materials used in production and the direct labor cost incurred. 2. Prepare the journal entry to record the overhead cost applied to production. 3. How many units were completed and transferred to finished goods during the period? 4. Compute the equivalent units of production for materials. 5. Compute the equivalent units of production for conversion. 6. What is the cost of beginning work in process inventory plus the cost added during the period for materials? 7. What is the cost of beginning work in process inventory plus the cost added dur: period for conversion? 8. What is the cost per equivalent unit for materials? 9. What is the cost per equivalent unit for conversion? 10. What is the cost of ending work in process inventory for materials? 11. What is the cost of ending work in process inventory for conversion? 12. What is the cost of materials transferred to finished goods? 13. What is the amount of conversion cost transferred to finished goods? the 14. Prepare the journal entry to record the transfer of costs from Work in Process to Finished Goods.
Robi 35 B/s 0 O 3 a al 31% D 2:12 am Grameenphone Final Home As... 5. Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income 20,000 12,000 8,000 6,000 $2,000 Required: (Answer each question independently and always refer to the original data unless instructed otherwise) 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 1,001 units, what would be the increase in net operating income? 5. If sales decline to 900 units, what would be the net operating income? 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? 7. What is the break-even point in unit sales? Prepared by: Hasibul Islam Russell; Contact@ 01917009927 or hasibul.russell@iubat.edu Page 5 of 6 J UBAT-INTERNATIONAL UNIVERSITY OF BUSINESS AGRICULTURE AND TECHNOLOGY Founded 1991 by Md. Alimullah Miyan 8. What is the break-even point in dollar sales? 9. How many units must be sold to achieve a target profit of $5,000? 10. What is the margin of safety in dollars? What is the margin of safety percentage? 6. Karlik Enterprises distributes a single product whose selling price is $24 per unit and whose variable expense is $18 per unit. The company's monthly fixed expense is $24,000. Required: 1. Prepare a cost-volume-profit graph for the company up to a sales level of 8,000 units. 2. Estimate the company's break-even point in unit sales using your cost-volume-profit graph. LUCK GOOD 6/6
Transcribed Image Text:Robi 35 B/s 0 O 3 a al 31% D 2:12 am Grameenphone Final Home As... 5. Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales Variable expenses Contribution margin Fixed expenses Net operating income 20,000 12,000 8,000 6,000 $2,000 Required: (Answer each question independently and always refer to the original data unless instructed otherwise) 1. What is the contribution margin per unit? 2. What is the contribution margin ratio? 3. What is the variable expense ratio? 4. If sales increase to 1,001 units, what would be the increase in net operating income? 5. If sales decline to 900 units, what would be the net operating income? 6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income? 7. What is the break-even point in unit sales? Prepared by: Hasibul Islam Russell; Contact@ 01917009927 or hasibul.russell@iubat.edu Page 5 of 6 J UBAT-INTERNATIONAL UNIVERSITY OF BUSINESS AGRICULTURE AND TECHNOLOGY Founded 1991 by Md. Alimullah Miyan 8. What is the break-even point in dollar sales? 9. How many units must be sold to achieve a target profit of $5,000? 10. What is the margin of safety in dollars? What is the margin of safety percentage? 6. Karlik Enterprises distributes a single product whose selling price is $24 per unit and whose variable expense is $18 per unit. The company's monthly fixed expense is $24,000. Required: 1. Prepare a cost-volume-profit graph for the company up to a sales level of 8,000 units. 2. Estimate the company's break-even point in unit sales using your cost-volume-profit graph. LUCK GOOD 6/6
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